Fitch nips Namibia

Fitch Ratings said it lowered Namibia's long-term foreign-currency issuer default rating to BB- from BB.

“Modest growth prospects and a rigid expenditure profile will maintain high fiscal deficits relative to BB peers. Fitch estimates the general government (GG) fiscal deficit widened to 9.5% of GDP in the fiscal year ending March 2022 (FY21/22, including 0.7% of GDP off-budget items not included in government numbers), above the estimated BB median 5% deficit for 2021, from-8.2% in FY20/21,” Fitch said in a press release.

“Despite fiscal consolidation efforts, we forecast that the rigid fiscal structure, rising interest costs and the gradual nature of the economic recovery will maintain government debt on an upward trend reaching 75% of GDP by FY24/25,” the agency added.

Another challenge for Namibia is that international financing conditions have tightened, which could mean higher interest costs.

The outlook is stable.

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